IT stocks under pressure amid global sell-off; Infosys, Wipro down 2%

Nifty IT index was down 1.2% as compared to a 0.45% decline in the Nifty 50 index in the early trade.

Shares of information technology (IT) companies were under pressure with Nifty IT index falling over 1% on Tuesday after Wall Street’s all major indices slid more than 2% on Monday, amid concerns about slowing economic growth ahead of a highly anticipated decision from the Federal Reserve on the course of US interest-rate hikes. The FOMC is scheduled to meet on Tuesday and Wednesday.

Infosys, Mindtree and Wipro were down 2% each, while NIIT Technologies, Tech Mahindra and Tata Consultancy Services (TCS) trading lower 1% each on the National Stock Exchange (NSE).

At 09:38 am; Nifty IT index was down 1.2% as compared to a 0.45% decline in the Nifty 50 index.

Infosys, the largest loser among Nifty IT index, was down 2% at Rs 680, falling 4% in past two trading days. The stock, however, had outperformed the market by surging 14% from its recent low of Rs 619 on November 21, as compared to a 2% rise in the benchmark index till Friday.

Wipro was, too, down 2% at Rs 333 in intra-day trade, after gaining 7% in the last three weeks.

A significant and faster-than-expected slowdown in the US/global economy, the rise in interest rates in the US and trade war with China could be the catalyst. Faster-than-expected return to Indian ‘financials’ as interest rates stabilise and stressed asset provisioning peaks are the major downside risks for IT sector, according to Nirmal Bang Equities.